Final answer:
Share blocking refers to when a shareholder's voting rights are temporarily withheld or restricted. This can occur in relation to proxy votes, where a shareholder authorizes someone else to vote on their behalf.
Step-by-step explanation:
Share blocking refers to a situation where a shareholder's voting rights are temporarily withheld or restricted. This phenomenon often occurs in relation to proxy votes, where a shareholder authorizes someone else to vote on their behalf. Share blocking can happen for various reasons, such as when shareholders have outstanding loans or are involved in legal disputes. For example, if a shareholder has pledged their shares as collateral for a loan, the lender may place a temporary block on the voting rights associated with those shares. This ensures that the shareholder cannot transfer or vote the shares until the loan is repaid or the blocking period expires. It's important for shareholders to be aware of any share blocking arrangements and understand the impact they may have on their voting rights. Proxy votes are a valuable tool for shareholders to participate in corporate decision-making, and any restrictions on these rights should be clearly communicated and understood.